Intellectual Property Law

Quanta v. LG: Method claims can be exhausted; harder to assert infringement later in distribution

By McKee, Voorhees & Sease, P.L.C.

The Supreme Court today decided Quanta Computer, Inc. v. LG Electronics, Inc., dealing with the doctrine of patent exhaustion (also called the first sale doctrine).  In a nutshell, the Court made it more difficult for patent holders to maintain a claim for infringement down the distribution chain of a product.  There were three main aspects to the decision:

1. Method claims, like product claims, are subject to exhaustion
2. Sale of a product whose only reasonable and intended use is to practice the patent and that "substantially embodies" the essential features of the patented method can trigger exhaustion
3. In order for a downstream sale to constitute an infringement, it must be outside the scope of the original license

More detail of these aspects of the holding and additional thoughts below the fold.

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Full post as published by FileWrapper on June 09, 2008 (boomark / email).